Proposal: Temporarily Block PlutusDAO From ARB Grants/Airdrops

[Penia]

Title – Proposal: Temporarily Block PlutusDAO From ARB Grants/Airdrops

Abstract - The PlutusDAO used their first ARB airdrop maliciously (see below why/how). The Arbitrum DAO should not give them more $ARB to scam more people into their scheme until they have made due on liabilities to their own users.

Motivation and Rationale

1. The original airdrop enabled them to create a scheme which took over 9M $ARB tokens from regular airdrop participants. These participants have spent the past few months held hostage, and are now forced to accept less than 0.5ARB for every ARB they deposited. This is how they did it:

• Created a misleading UI to “claim your arb airdrop”. By using this UI, users were not given $ARB tokens after claiming their airdrop, but instead plsARB tokens. The users ARB went straight into the pls treasury. It wasn’t until later that they added the disclaimer which explained ARB would be forever locked in the plutus treasury, but plsARB would be swappable for arb via an AMM at a market determined rate.
  

  

• Then, if this UI wasn’t enough the plutus dao told users that plsARB is better than ARB because it would earn 2 things. Some PLS emissions and part of the ARB airdrop that the plutus dao itself got. This is tricky because they used the money the arbitrum dao gave them to fleece users into giving them their own arb under the promise of getting paid extra arb tokens.

• This exciting offer, coupled with the promise of liquidity if users wanted out, allowed them to suck in over 9 million arb tokens. This would be a great offering and not an issue if these users were happy and didn’t feel that they’d been tricked. But the truth is, thousands of small to large $ARB holders are stuck and begging to get out, but cant, and the arbitrum dao is enabling it by continuing to fund them. Today these 9M arb are forced to accept less than 0.4 ARB per plsARB because the plutus dao is not doing anything to ensure good liquidity, despite having 100% of the 9M arb sitting in a wallet, fully able to repeg.

• Here is their attempt to damage control the situation, please read the responses from real users to see evidence that users have been tricked and want out. This is just the comments on twitter. Every single day multiple users come into the plutus discord and ask how to get out, only to be met with the team saying something like “too bad you should have read the docs”. Many end up banned and silenced with their arb trapped in the dao treasury: https://twitter.com/PlutusDAO_io/status/1694726055926571071
  
  
  

2. The promise of liquidity was misleading. The team promised deep and well incentivized liquidity. Instead they added $100k of liquidity themselves (this is less than 1% of all the plsARB in existence) and incentivized a 0-1 LP pool which ultimately ensures the price is… not 1 ARB per plsARB. Even if users knew they would have to swap out in the AMM, they would assume deep liquidity would mean far far more than 1%.

3. No voting: plsARB holders have no rights to use the underlying ARB to vote. This is similar to cvxCRV or auraBAL but those assets are mostly pegged and their teams ensure it. plsARB holders cannot vote for themselves to be freed either, they cant even lobby for pls holders to free them as plutus advertises itself as a dao but has no voting. The team just decides how to wield the DAO arb, and uses it how they please (https://twitter.com/PlutusDAO_io/status/1702666102285963596). Governance by pls holders is forever incoming, but it doesn’t matter as the team holds more supply than the entire market cap of plutus.

4. Plutus wants to make their problem our problem. They tell users that plsARB is not pegged because the arbitrum dao gives no yields to the underlying arb, so nobody has a reason to buy it. They have even made proposals to the arbitrum dao to pay yields to fix their scam so they don’t have to return ARB to plsARB holders who want out: https://twitter.com/PlutusDAO_io/status/1700564627644637421. It is our duty to help the plsARB holders escape this hostage situation as our incentives got used to enable it. We should not do it by giving out ARB yields but by holding plutus responsible for their own problems before we give them more money and yields.

5. Discord users have made suggestions to repeg plsARB but the team will not accept any solution that involves redemptions. Even those that are reasonable like locking plsARB for 1y before redeeming.

6. To make matters worse, the team stole a significant amount of the last airdrop

• There was NO dao vote to give the team this supply
• This was over $700,000 USD which they gave to themselves (already completed and sent to their own wallets)
• the entire 9M of plsARB/ARB that they took from users got LESS of the airdrop than the team took for themselves
  
  

7. They have used this scheme on jonesdao, dopexdao, and those projects have been unable to help. Their holders face the same fate. Arbitrum can do something as the plutus dao is going to want continued support from us.

8. Why is there even a “liquid locker” for $ARB when $ARB cant be locked anywhere? And why do we continue to fund it based on TVL metrics from users that have no way out?

Overall the plutus dao used the last airdrop to enrich themselves, trap users, and steal governance power. Tons of ARB airdrop holders are trapped and have no voice or vote to help themselves. Its time we help them or at least ensure we don’t enable more of this.

The plutus dao will likely give poor responses such as:

• “PLS holders can vote to allow plsARB holders to redeem” (answer: pls holders would never do this as they want to keep all the arb underlying governance for themselves. But if even if they wanted to, there is no voting)
• “We always said leaving would be at a market determined rate” (answer: this is a technicality they use to wash their hands of this scheme. Reality is they said you could swap out with deep liquidity but that’s non existent and mispriced.
• “We paid pls and arb emissions to get this arb, why would we give it back?” (answer: they could easily add a small redemption fee to cover that cost, as highlighted in discord by many)

Plsarb
0x7a5D193fE4ED9098F7EAdC99797087C96b002907

Arb underlying plsarb
0x180Bb71666C4de074b4daA17Ed579aFcB8eB2C25

Steps to Implement

• Do not give more ARB to the plutus dao until they have committed to a resolution that will bring 1 plsARB to 1 ARB or something close. Multiple people have made proposals to make this happen this in the discord, but they all go ignored or silenced
• Team should return the ARB they stole from the DAO without a vote
• Once this plan has been implemented, they should write a proposal to re allow them to be supported by the ARB dao in airdrops / incentives / grants.

Timeline - Immediate

Overall Cost - None